[Federal Register Volume 75, Number 118 (Monday, June 21, 2010)]
[Notices]
[Page 35098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14827]
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OFFICE OF PERSONNEL MANAGEMENT
Federal Employees' Retirement System; Normal Cost Percentages
AGENCY: Office of Personnel Management.
ACTION: Notice.
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SUMMARY: The Office of Personnel Management (OPM) is providing notice
of revised normal cost percentages for employees covered by the Federal
Employees' Retirement System (FERS) Act of 1986.
DATES: The revised normal cost percentages are effective at the
beginning of the first pay period commencing on or after October 1,
2010. Agency appeals of the normal cost percentages must be filed no
later than December 21, 2010.
ADDRESSES: Send or deliver agency appeals of the normal cost
percentages and requests for actuarial assumptions and data to the
Board of Actuaries, care of Gregory Kissel, Actuary, Office of Planning
and Policy Analysis, Office of Personnel Management, Room 4307, 1900 E
Street, NW., Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Christopher Ziebarth, (202) 606-0299.
SUPPLEMENTARY INFORMATION: The FERS Act of 1986, Public Law 99-335,
created a new retirement system intended to cover most Federal
employees hired after 1983. Most Federal employees hired before 1984
are under the older Civil Service Retirement System (CSRS). Section
8423 of title 5, United States Code, as added by the FERS Act of 1986,
provides for the payment of the Government's share of the cost of the
retirement system under FERS. Employees' contributions are established
by law and constitute only a small fraction of the cost of funding the
retirement system; employing agencies are required to pay the remaining
costs. The amount of funding required, known as ``normal cost,'' is the
entry age normal cost of the provisions of FERS that relate to the
Civil Service Retirement and Disability Fund (Fund). The normal cost
must be computed by OPM in accordance with generally accepted actuarial
practices and standards (using dynamic assumptions). Subpart D of part
841 of title 5, Code of Federal Regulations, regulates how normal costs
are determined.
Recently, the Board of Actuaries of the Civil Service Retirement
System concluded that there should be no change to the set of economic
assumptions used in the dynamic actuarial valuations of FERS. The Board
reviewed statistical data prepared by the OPM actuaries and considered
trends that may affect future experience under the System.
Based on its analysis, the Board concluded that it would be
appropriate to assume a rate of investment return of 6.25 percent, with
no difference from the existing rate of 6.25 percent. In addition, the
Board anticipated a continued inflation rate of 3.50 percent, and a
continued projected rate of General Schedule salary increases at 4.25
percent. These salary increases are in addition to assumed within-grade
increases that reflect past experience. The economic assumptions
anticipate that, over the long term, the annual rate of investment
return will exceed inflation by 2.75 percent and General Schedule
salary increases will exceed long-term inflation by .75 percent a year,
with no difference from the current assumptions.
The Board adopted changes in the mortality assumptions as well as
changes in all the demographic assumptions listed as factors under
Sec. 841.404(a) of title 5, Code of Federal Regulations. In addition
to the changes in mortality assumptions, the Board found that recent
statutory changes, most significantly sections 1901 and 1904 of the
National Defense Authorization Act for Fiscal Year 2010, Pubic Law 111-
84, 123 Stat. 2109, and a recent decision of the U.S. Court of Appeals
for the Federal Circuit, Adkins v. Office of Personnel Management, 525
F.3d 1363 (Fed. Cir. 2008), require increases in the normal costs.
The normal cost calculations depend on economic, demographic, and
mortality assumptions. The demographic assumptions are determined
separately for each of a number of special groups, in cases where
separate experience data is available. Based on the changes in the
demographic assumptions, the economic assumptions, and the other
factors described above, OPM has determined the normal cost percentage
for each category of employees under Sec. 841.403 of title 5, Code of
Federal Regulations. The Governmentwide normal cost percentages,
including the employee contributions, are as follows:
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Members...................................................... 19.2%
Congressional employees...................................... 17.7%
Law enforcement officers, members of the Supreme Court 27.0%
Police, firefighters, nuclear materials couriers, Customs
and Border Protection Officers, and employees under section
302 of the Central Intelligence Agency Retirement Act of
1964 for Certain Employees..................................
Air traffic controllers...................................... 26.8%
Military reserve technicians................................. 15.3%
Employees under section 303 of the Central Intelligence 17.6%
Agency Retirement Act of 1964 for Certain Employees (when
serving abroad).............................................
All other employees.......................................... 12.5%
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Under Sec. 841.408 of title 5, Code of Federal Regulations, these
normal cost percentages are effective at the beginning of the first pay
period commencing on or after October 1, 2010.
The time limit and address for filing agency appeals under
Sec. Sec. 841.409 through 841.412 of title 5, Code of Federal
Regulations, are stated in the DATES and ADDRESSES sections of this
notice.
U.S. Office of Personnel Management.
John Berry,
Director.
[FR Doc. 2010-14827 Filed 6-18-10; 8:45 am]
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